Oil markets stayed on pace with the general dollar dumping with the previous weeks bounce attributed to the possibility of rate cuts possibly driving demand. For now we have little catalyst early in the week which suggest we play a range retreating to the trendline, likely not pushing under last weeks lows. On the top side we should be well resisted at the approach of range play supports from early April. Look to Friday’s Non-farm Payrolls for clues on where we break with weakness to drive the US rate cut narrative.
Resistance
- 88.59 – Friday’s High
- 88.31 – Intraday Consolidation Resistance
- 87.59 – Friday’s Low
Support
- 86.87 – Accelerated Trend Line
- 86.23 – Thursday Pullback Low
- 85.57 – 50D Moving Average
We opened the week with a downside gap after Friday’s high wave spinning top capped the bounce off 50D Moving Average last Monday. Intraday we were seeing bearish divergences ahead of the open and with the gap immediate focus will be to pull back to the daily trend line around 86.87. Given the limited room from market prices we prefer waiting for the trend line and looking for long intraday tails before buying. Bears are well reminded to use tight stops as overall trend is bullish and gaps inside a consolidation are liable to be closed.
